To apply for personal loans can be a difficult task if you have not planned it properly. The first question you need to ask yourself is why do you need a loan for? What is the purpose behind the loan? How will you pay back the loan? All these questions should be addressed first and a proper homework is required because people generally have no idea behind the loan and they involve themselves into financial trouble which is later hard to pay back.

The second most common factor which effects the personal loan is “credit history”, the better the credit history, the lower the rates of personal loans. For those with bad credit history should read out previous articles – Bad Credit History: Apply for Immediate Personal Loans. It might be possible that you applied for a loan and it has been rejected which is very common now a days as the credits department in banks and financial institutions are playing financial savvy these days due to economic congestion. There might be many reasons for loan rejection but your main focus should be a positive approach towards the lender.Following are the ways you can apply for personal loans;

1. Social Lending

Also known as peer 2 peer lending, allows the borrowers to acquire personal loans from lending clubs. Prerequisites for acquiring a loan from lending clubs include; the borrower must be a US resident, the borrower needs FICO score to be atleast 600 and last but not the least your debt to income ration (excluding mortgage) should be below 22%.

What you get out of this is extreme low interest rates and the debt management process is quite faster than normal processes. It only have some strict requirements for borrower and good credit history is a must.

2. Credit Cards

The most easiest way to get personal loans with lowest interest rates are considered to be credit cards but that is just not true. Getting credit card can be a source of immediate cash but will push you into a debt cycle which is not suitable for those who go easy with repayments on time. It can be a daunting task for those who have a bad credit score. There are 10 ways on how to improve your credit score. It had been observed that people using credit cards are trapped in debt and could not quit the card habit which is digging a bad credit history for them. The best option available is to use DEBIT card which only have very minimal amount of transaction and service charges.

3. Banks and Financial Institutions

If you have a good relations with your current bank and you have a good credit score  then you can apply for loan in the very bank you already know. Remember, not to apply for loans when you have a bad credit history. Consult our Credit Repair Guide for bad credit score and bad credit history. After you come clean on your history, you may talk to the bank for various ways on how to get personal loans with lowest interest rates. There are two general options you have with interest rates, Fixed and Variable. It is highly recommended that you go for the fixed interest rates for personal loans. There are many effects of bad credit history therefore you should never let your credit score down and the payments should be made on time otherwise you won’t be able to apply for loans next time.